Amazon Prime Video is officially rolling out commercials in its streaming platform today — a move that might leave some of its 70 million subscribers with mixed feelings.
Similar to platforms like Netflix and Disney+, users subscribed to Prime Video's basic plan will begin to see ads in the middle of their viewing sessions.
Subscribers who want uninterrupted viewing may steer clear of commercials by paying an additional $2.99 per month. This brings up Prime Video's monthly subscription plans from $8.99 and $14.99 to $11.98 and $17.98, respectively.
Users interested in the ad-free streaming experience can "preorder" the new plan on Amazon's official website.
Primed for Profit
While Prime Video subscribers may be divided over the move, analysts anticipate it could rake in over $5 billion in revenue for Amazon annually.
Notably, they predict that only about one-third of subscribers will take the ad-free option, indicating a significant potential revenue stream for Amazon.
The move aligns Prime Video with its streaming competitors like Netflix and Disney+, both of which have long incorporated advertisements into their platforms.
However, Prime Video's success in the ad-based model remains uncertain, as it competes for advertising dollars against more established platforms that have been doing it for years.
A Long Way Ahead
While Prime Video may trail behind Netflix and YouTube TV in terms of viewership numbers, it holds a crucial advantage: access to vast amounts of customer data derived from its extensive Amazon Prime membership base.
About 70% of adults in the U.S. are subscribed to Amazon Prime, and this allows the company to deliver more targeted ads, potentially offering brands a higher return on investment.
According to ad buyers who spoke to The Wall Street Journal, Prime Video still faces challenges despite this advantage, including the perception that it lacks a substantial volume of hit shows compared to its competitors.
In order to convince advertisers to prioritize Prime Video, the streaming service may need to cultivate more compelling content offerings.
Editing by Katherine 'Makkie' Maclang